ABSTRACT: Few would question the primacy of economic analysis in the construction
and enforcement of contemporary antitrust rules. Chicago-derived
principles of price theory have slowly, but inexorably, transcended
their traditional boundaries within the United States to find welcome
application in Europe and elsewhere. Indeed, it has become standard for
antitrust authorities around the world to frame issues of competitive
concern in exclusively economic terms. Price theory would thus seem to
have become the ubiquitous standard by which to inform competition
policy.

Yet, international antitrust harmonization has proven to be
frustratingly elusive. Although the two most important jurisdictions
find broad agreement on many aspects of competition policy, notable
instances of EC/U.S. divergence have become apparent. Given the primacy
of economic analysis, it is only natural to suppose that the
transatlantic divide will narrow in parallel with advancement in
society’s understanding of economics. Put differently, contemporary
areas of disagreement should be susceptible to resolution through the
lens of economic theory and econometrics alone. Practice ostensibly
mirrors this theoretical prediction, as both sides to the transatlantic
rift vociferously promote the supremacy of their respective viewpoints
in economic terms. The U.S. Justice Department has been especially
vocal (and cutting) in its criticism of what it considers to be
erroneous economic policy underlying European jurisprudence.

We suggest that the direction of this debate may be misguided.
Although price theory has forever revolutionized the substance and
application of competition law, its contribution is not unlimited.
Economic analysis is subject to serious epistemological limitations
with respect to certain areas of antitrust concern, in particular with
regard to the trade-off between the short- and long-run. It is
noteworthy indeed that recent areas of major divergence are
characterized by precisely such economic indeterminacy. Moreover, these
policy disagreements are not limited to the international arena—a
serious and disturbing rift has become apparent between America’s two
enforcement agencies.

We argue, first, that there are important limitations to economic
analysis and, second, that the pursuit of long-run convergence must
recognize these constraints and rely on a mutual understanding of
distinct socio-political cultures and traditions. Recent scholarly and
public debate has been noteworthy for its exclusive focus on economics,
and may for that reason have been incomplete and inefficacious. This
Article explores these concerns by focusing on perhaps the most
divisive area of antitrust law, refusals to deal. Such refusals cast
the tension between balancing short- and long-run effects into critical
relief, and render explicit the limitations of economic theory. Given
that the bastion of the Chicago School, the United States, has been
incapable of agreeing on a uniform approach in this area, the idea that
international law can be harmonized on the basis of economics alone
seems strikingly quixotic. Nevertheless, we conclude that outside of
the empirically indeterminate issue of balancing the short- and
long-run, economics can indeed lead policymakers to optimal and
well-defined outcomes.